Business owners may find that innovation has been dull because of the social and economic impacts of the current situation. If your business is going through a damp sales period, it can be a threat to the future of your business. Consider this as an opportunity to step back and focus on the following survival strategies.
The first step is to evaluate the rate at which your business is losing money. This includes fixed costs like rent, and variable costs such as salaries and material purchase. The difference between your revenue and income can reveal how much cash flow you have, and how long your business can sustain itself under current circumstances. This can help you formulate a more realistic financial plan.
Changing business models
If your net burn rate is negative, your cash flow shortage may have you thinking about accessing more capital from investors. However, it is important to remember that few investors are looking for new business deals in this situation.
However, you can still make changes to your business model that can help sustain it during the pandemic. This could mean changing your sales strategy to focus on e-commerce platforms, altering your pricing and payment model, and optimising resource allocation to give your business the competitive edge that can make a huge impact during this time.
Consider renegotiating contracts with your key suppliers to lower prices temporarily. Review grants and benefits offered by the government to stimulate small businesses. It can be helpful to study lender concessions to see if you have the option of repayment deferrals and cash handouts to ease the burden of repayments.
If your employees are working from home, you may be able to renegotiate rent or downsize your office. Co-working spaces have a lot more flexibility with their monthly contracts.
Refresh your marketing
This might be a great time to rid your business of redundant marketing practices and bring in affordable, effective strategies instead.
Deactivate under-performing advertisements, develop a strong online presence to engage with your customers, and even consider calling key clients to check up on them, to develop better client relationships. Offering gift certificates and exclusive services for long-term customers can keep them loyal to your business. Analyse if any of your services can be offered remotely and offer discounts to attract new customers.